5 Things People Get Wrong About Estate Planning

Estate planning can be an uncomfortable topic. Nobody enjoys talking about death or what's going to happen to our property after we die. But estate planning is an important process to protect your beneficiaries from creditors, poor decisions, family conflict, and stress. Here are five things most people get wrong about estate planning.

1. "I'm not a multimillionaire. Estate planning is only for the rich."

This is one of the most common misconceptions an estate planning Lawyer will hear. Everyone has property they value, be it grandpa's old wristwatch, a piano, or a piece of real estate. Perhaps there's even a child who requires long-term care. Everyone should have an up-to-date estate plan in place, regardless of wealth.

2. "It's not complicated. I can follow a DIY YouTube tutorial."

Ask any business Lawyer, family law Lawyer, or an estate planning Lawyer about the consequences of doing any sort of "do-it-yourself" legal process. The legal system is complex and constantly changing. And if you're not careful, you could leave behind a huge mess for your loved ones to clean up.

An estate planning Lawyer is always learning about the most recent changes and updates. One missed signature or mistake in wording could be extremely costly. When it comes to the legal system -- where the smallest error could have the most undesirable consequences -- we highly recommend not going the DIY route. Working with a professional will provide you with valuable peace of mind.

3. "I have a will. That's good enough."

A will is not the same as an estate plan. A will is a document that is just a small part of the estate plan. An estate plan takes into consideration many different legal documents and how they work together. The estate planning Lawyer will make sure all the legal documents, including the will, are in perfect order.

In the event of your death, there will be no family or business associate discord, confusion, or legal holdups. The process of handing your estate over to your beneficiaries will be smooth.

4. "I'm married. When I die, everything goes to my spouse."

You may wish everything to go to your spouse after your demise, but there are many different legal and other complications that could arise that prevent this from happening. Everyone from creditors to business Lawyers could go after your assets. An estate planning Lawyer will help make sure your designated beneficiaries legally get the assets you want them to get, without any legal loopholes.

As an asset class, residential real estate is a $29 trillion industry, while commercial real estate adds another $10 trillion. If you have residential or commercial real estate, it's critical to have a beneficiary in place. Assuming that your spouse will automatically become your beneficiary could lead to major problems after your death.

5. "I'm in my thirties. I am years away from having to think about estate planning."

In the event of your death, your residence could end up in probate court. Assuming you're in your thirties, you might have a spouse and dependents. If so, this would be an enormous burden to place on them. Creditors, extended family, and other outside parties (e.g. personal injury Lawyers) could also come after your estate. It's never too early to start thinking about estate planning, even if you're in the prime of life. Estate planning will allow you and your family to prepare for unexpected events; it's better to have everything in place well before you need to than for loved ones to needlessly suffer later on.

Through years of experience and continuing education classes, estate planning Lawyers understand the formalities involved in drafting a solid estate plan. In addition to estate planning, they can also help you draft a power of attorney and medical directives in case you become incapacitated.

Did you know 71.6% of Americans lack a will or estate plan? If you don't already have your estate plan in place, now's the time to get your affairs in order. Please contact us today to get started.

Frequently Asked Questions

Do I need a will?

We have been married for the last 25 years but don’t have any children. Do we need a will, or would everything just go to the surviving spouse anyway?

‍Yes, you do need a will. Whenever you don’t have any children, under the statutory distribution scheme for individuals that die without a will, your spouse would receive your entire estate. However, you should still have a will for at least two reasons:

Appointing an executor of your estate; and
Making instructions for the distribution of your estate in the event that you’re predeceased by your spouse.

Appointment of an executor of your estate.

‍The executor named in a will has the legal authority to take possession of all your assets, do your final income tax returns, and deal with banks and government institutions. If you don’t have a will, a court would have to appoint an executor of your estate to deal with any assets that were not jointly owned, as well as any registered investments that did not have a named beneficiary. The process of appointing an executor usually takes few months, so in addition to incurring unnecessary costs, there will be an extended delay during which your spouse will not have access to the assets in your estate. In my experience, some financial institutions will waive a probate requirement if your spouse is the named executor and the only beneficiary of your estate, which could provide your spouse with ready access to some assets shortly after your death.

‍Distribution of your estate if you survive your spouse.

‍By having a will in place, you will make sure that your estate is distributed the way you want it to be in the event that your spouse passes away shortly before you, or in the event that you are unable to make a will after your spouse’s death. Under the statutory distribution scheme, if you don’t have a spouse nor children, your estate would go to your parents. Alternatively, if your parents are deceased, your estate would go to your siblings. This may not be your wish. For example you might want to leave part of your estate to your spouse’s family, or you may wish to skip your parents and siblings and distribute the estate among your and your spouse’s nieces and nephews, or make gifts to a charity or charities. No matter which option you choose, having a will can provide the peace of mind of knowing that your estate will be distributed according to your wishes.

Wills - How are they validated? Can I hand write my own?

I made my own hand-written will few years ago. I believe it’s valid and truly reflects my wishes, however my financial advisor told me I should get a proper will drafted by a Lawyer. Why should I do that?

‍Wills are legal documents that will dictate the distribution of assets after one’s passing and there are many reasons why wills should be prepared by a Lawyer specializing in this area of law.

‍Formal validity For wills to be valid and legally binding they have to be executed (signed) according to legal requirements. A Lawyer preparing your will would ensure that the document is executed properly and therefore legally valid and binding.

‍Comprehensiveness A Lawyer can make sure your will deals with all important matters, such as appointment of executor(s) and alternate executor(s), distribution of your assets, appointment of custodians and guardians for your children and setting up trusts for minor beneficiaries. Your Lawyer will also ensure your will gives executors enough powers to properly and efficiently administer your estate and follow your testamentary wishes.

‍Reflecting all your legal obligation

‍Under the law you are obliged to provide for your spouse and your dependents. Your Lawyer can advise you of your obligations to such persons.

‍Clarity of language

‍A properly drafted will should use language that is clear and precise in order to prevent any issues with interpreting your instructions contained in the document. Your Lawyer will make sure that proper language is being used to avoid any ambiguities and clearly reflect your intentions.

‍Preventing future challenges to your will

‍Having a Lawyer draft your will significantly reduces any risk of future legal challenge to its validity based on your legal capacity or any undue influence. When your legal capacity might be an issue, your Lawyer will gather and keep all the required evidence to prove you had the necessary legal capacity to make a will. He or she will also ensure there is no undue influence from any individuals, including family members that would affect any of the provisions of your will.

Do I need a lawyer to get a will and powers of attorney?

Your last will does not have to be drafted or signed by a Lawyer. However, a will is a legal document that will determine who will have control of your estate and how it is going to be distributed. There are certain legal requirements that have to be met for the will to be valid. As such it is very important that your will is drafted, signed and witnessed properly.

‍How can a Lawyer help?

‍A Lawyer will ask you right questions to help you determine how to distribute your estate while taking into consideration various contingencies and scenarios that might be in place at the time of your passing. She will discuss with you legal clauses that you might want to include in your will, such as a beneficiary designation for your RRSP and insurance policies, expressing your wishes in regards to the custody of your minor children or confirming compensation for the executor. Your Lawyer will also talk to you about the powers that you want to give to your executor in addition to the powers he would have under current legal framework or limits that you want put on such powers. She will properly draft your will and will try to help you understand all the legal clauses and legalities contained in a will. Your Lawyer will also make sure that your new will revokes all your previous wills or other testamentary documents. Most importantly, your Lawyer will also make sure that your will is properly signed and witnessed.

Your last will is an important legal document and you should retain a professional to help you with its preparation and execution. Seeking and using such help will give you peace of mind knowing that your affairs are in order and make sure that your will reflects all your wishes.